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AGENDA ITEM NO. 20.

CITY OF HAWTHORNE
City Council
AGENDA BILL
For the meeting of 11/12/2024
Originating Department: City Attorney
                                                      
City Manager:
Department Head:

SUBJECT:

Funding Request for Insurance Reserve/Insurance Premium/Auto Phys Dam-CE-Earth Account (Earthquake Insurance Account) in the Amount of $99,000 for the Current Fiscal Year and Request for Approval of Blanket Purchase Orders.
 

RECOMMENDED MOTION:

Staff recommends that the City Council approve the additional funding in the amount of $99,000 for Earthquake Insurance Account (Account No. 250-1902-736-0-0-46224), encumber for the same and approve the increase in the blanket purchase orders for the Earthquake Insurance premium.
 

DISCUSSION:

The city attorney’s Insurance Premiums section of the 2024/2025 fiscal year budget included $125,000 budgeted amount for earthquake insurance coverage for the city owned real properties.  The budgeted amount was short of the actual premium charges by $98,952.19 due to two reasons.  First, the current price surge in the insurance market resulted in the actual earthquake insurance premium to rise to $158,742.43, leaving a shortfall of $33,742.43.  Second, the city’s recent bond issuance required a reappraisal of the city’s real estate holdings as they are the security to the bond liability.  The reappraisal resulted in the significant increase in value of the said real properties that caused another increase in earthquake insurance premium by $65,209.76.  
 
 

ECONOMIC DEVELOPMENT STRATEGIC PLAN:

n/a

FISCAL IMPACT:

$99,000 from General Fund

 

NOTICING PROCEDURE:

72 hours posted notice pursuant to the Ralph M. Brown Act
 

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